Nikkei falls for 5th day, hit by Portugal bank fallout

Thu Jul 10, 2014 9:53pm EDT

* Nikkei has fallen 1.7 pct for the week
    * Canon soars on strong profit report

    By Ayai Tomisawa
    TOKYO, July 11 (Reuters) - Japan's Nikkei share average dropped for a fifth
day to a fresh 1 1/2-week low on Friday morning as concerns about the financial
health of Portugal's top listed bank turned investors risk-averse.
    The Nikkei shed 0.3 percent to 15,164.68 in mid-morning trade after
falling to as low as 15,101.49, the lowest since June 30. For the week, the
index has declined 1.7 percent.
    Analysts say that while investors remain jittery over developments in
Europe, it is unlikely that the market will extend its falls significantly.
    "This news was like throwing a wet blanket on expectations that the global
economy was recovering, especially because there had been no bad news from the
region lately," said Hiromichi Tamura, chief strategist at Nomura Securities.
    But he added that this may not lead to a serious selloff as the market is
taking a wait-and-see approach for the time being.
    Espirito Santo Financial Group, the largest shareholder in
Portugal's Banco Espirito Santo, suspended trading in its shares and
bonds, citing "material difficulties" at parent company ESI. The bank's shares
tumbled 17.2 percent, and Portugal's benchmark stock index fell 4.2
percent. 
    The dollar was at 101.29 yen after earlier falling to 101.04 yen, the
lowest since May 21. Exporters, which are hurt by the stronger yen, lost ground,
with Toyota Motor Corp falling 0.7 percent,  Hitachi Ltd 
sliding 0.9 percent and Toshiba Corp slipping 1.1 percent.
    Bucking the weakness, Canon Inc soared 3.4 percent after the Nikkei
business daily reported that the company's operating profit for the April-June
quarter likely rose 10 percent to 110 billion yen helped by strong sales of
copiers.
    The broader Topix dropped 0.4 percent to 1,254.12, and the
JPX-Nikkei Index 400 declined 0.4 percent to 11,410.37.

 (Editing by Eric Meijer)
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